The Portland daily press., 1887-10-20
SUED FOR MILLIONS.
sondhoiders Who Think They are the
Victims of Fraud.

NEW YORK, Oct. l9.-As an outgro with of
the Pacihc Railroad Commission a petition
has been prepared by representatives of the
holders OF the consolidated bonds of the
Kansas Pacific Railway Company. and spit
VIII be Immediately instituted against Jay
Gould and Russell Sage as trustees of the
consolidated mortgage Of the Kansas Pacific
railway Company. The suit will be brought
In the supreme Court of the State of New
YORK. The plaintiffs in their petition pray
1or the removal of Messrs. Gould and Sage
as trustees of the consolidated MORTGAGE of
OF the Kansas Pacific Company and the an.
pointmcnt of "proper persons" in their
place. They also ask that the defendants be
adludged TO account for the stock of tine Den
yer Pacific Railway and Telegraph COMPANY
taken from the trust of the consolidated
d mod,tgage OF tne Kansas Pacific Company,
ana Ior all dividends, premiums and other
proceeds OF the stock for which they are
equitaDly accountable as trustees. The
court is requested to appoint a receiver Of
tne trust funds, who may also administer the
tha ttuse until Lhe nnal decree In the suit and
the appointment of.new trustees,
The suit has long been Threatened and Ia
OF similar nature to suits which have been
Dqegun once before but never brought to trial.
frlor TO the consolidation of the Union Pa
G1nc ana Kansas Pacific roads in 1879. the
Kansas Pacific held S3,0O0,0O0 Denver Pa
cine stock in its treasury. An action was
Drought against Messrs. Gould and Sage for
the release of this stock from the Kansas
racine mortgage, which was successful. The
STOCK at that time was worth only ten cents
ON the dollar, but subsequent to the consoli-
datlon rose for par under the guarantee of
the Union Pacific. The bondhOlders allege
that this transaction was fraudulent its ma
ture and claim the trustees are accountable
10 ABOUT Co,OOO to the bondhoiders.
The nominal plaintiffs, whose names are
appended to the petition, are Adrian Stoop
and Jan Otto Willem Franz Reus, two west
ern bankers. The plaintiffs purchased 81
600 OF The bonds on January 10, 1880, and at
various times thereafter, in 1880 and 1881,
made subsequent purchase to the amount
OF S34.co0. The stock Of the Union Pacific
procured BY Gould and Sage fraudulently, as
the plaintiffs allege, in exchange for the con-
solidated bonds. has since so increased in
value that with interest. premiums and divi-
dends, Gould and Sage are now accountable
TO the plaintiffs and all the other bondhold-
ers IN the sum of S6.000,000.
The attorney for the plaintiffs is Mr. w.
IL. Delaney, No. 50 Broadway, and on.Oc-
tober IA ne wrote to the chairman Of the Pa
cific Railroad Commission, Mr.. L. T. Ander-
son, asking for copy of the printed record
OF the commissions proceedings "for the
purpose of laying the same before the dis
trict attorney Of York York county, with
view 10 tne enIOrcemenL OF the pro-
provisions of the Penal Code relating to
trustees against the Jay Gould and Russell
Sage" On the same day NJ. Anderson re-
piled, saying, in effect, that under section
OF the act of Congress Of March 3, 1887, Great
ing the commission, it is provided that the
testimony given by witnesses before the
commission shall not be used against the
person SO testifying ON the trial of any
criminal proceeding. He therefore declined
to furnish copy, of the proceedings for the
purpose indicated.